Chinese state-owned firm China Merchants Group (CMG) has planned to construct a logistics complex in Sri Lanka with a $392m investment.
With this amount, China’s investment reaches $2bn in Sri Lanka, which is aiming to restart its economic recovery after defaulting on its overseas debt in 2022.
The $392m investment marks the first major foreign investment in Sri Lanka after its default.
This logistics hub will be built at the Port of Columbo, which is the only deep-sea port between Dubai and Singapore.
CMG will own a 70% stake in the company being established to build the logistics complex.
Claimed to become the largest logistics hub in South Asia, CMG aims to complete its construction by the end of 2025.
CMG currently manages the port complex at Hambantota, which is in southern Sri Lanka.
Hambantota is considered one of the “white elephant” projects of Sri Lanka’s previous president Mahinda Rajapaksa, who ruled the country for a decade until 2015.
After being unable to repay the loan taken in 2017 for the construction of Hambantota, Sri Lanka hand the port over to CMG on a 99-year lease for $1.12bn.
Allaying concerns of the neighbouring country India for leasing the port to CMG, Sri Lanka has stated that its ports will not be used for military purposes.
